The Decoupling of Energy, Carbon and GDP in the United States

The recent announcement by the International Energy Agency that CO2 emissions fell in 2014 while GDP expanded was welcome news.  The decoupling of  carbon and economic activity has been a steady trend for a long time in the United States.  Figure 1 shows that real GDP  grew by a factor of 7 from 1950 to 2013, while CO2 emissions increased by about a factor of 2.  The result is that the carbon intensity of GDP decreased by about 72 percent over that period.Energy, Carbon, GDP in US

As Figure 1 shows the use of energy increased much more slowly than did GDP.  The principal driving forces behind the decline in the carbon intensity of GDP are:

  • improvements in the efficiency of energy use (appliances, lighting, cars, buildings, etc.), driven in part by government standards
  • higher energy prices
  • structural changes in the economy such as a shift to services that are less energy-intensive than manufacturing
  • shifts to higher quality sources of energy such as primary electricity (nuclear, hydro, wind, solar, photovoltaic and geothermal) (see Figure 2)

Changes in the composition of energy use also contributed to falling carbon intensity of GDP.  As Figure 2 shows, low carbon fuels (nuclear plus renewables) captured a larger share of primary energy, driven initially by the expansion of nuclear energy and more recently by biomass, solar, and wind.  Shifts in the composition of fossil fuels also contributed to decarbonization.  Natural gas increased its share of total fossil fuel use from 19 to 34 percent from 1950 to 2013.  This is important because the carbon content of natural gas (53 kg per million Btu) is much lower than oil products such as motor gasoline (71 kg per million Btu) and bituminous coal (93 kg per million Btu).

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